Sense on Cents

The scandal centering on the rigging of Libor has the potential to rock the entire financial industry like no other scandal in our lifetime. While I have witnessed some industry insiders and others on the periphery attempt to downplay the impact of this scandal, they are mistaken in their analysis.

I would love to be privy to the conversations currently ongoing between individuals at the Fed, Treasury, Department of Justice, the CFTC, SEC, FINRA and their counterparts at the Bank of England, the FSA, other central banks, and regulatory authorities. While I have no doubt that selected financial fiascoes have been conveniently kept under the rug, I do not think there is a rug large enough to cover up this mother-of-all-scandals.

As this scandal continues to unfold, I think it may very well have a significant negative impact on the overall equity markets. Why? As investors hear and learn more about this scandal, they will be inclined to sell the market as a vote of no confidence and no trust in the overall system.

For added flavor I highly recommend these two recently released video clips. The first runs just over 9 minutes and is especially hard-hitting. The latter, not quite 7 minutes, addresses the magnitude of this scandal.

Larry Doyle

Related Sense on Cents Commentary
Barclays Libor Scandal: Reports Regulators Knew; Time for Independent Investigation and Eliot Spitzer
Barclays Libor Scandal: How Big Will This Get?
Barclays Libor Scandal: Reports Regulators Knew; Time for Independent Investigation and Eliot Spitzer
Barclays Libor “Price Fixing”: Collusion Is Illegal. . .

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I have no affiliation or business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.

This entry was posted on Monday, July 9th, 2012 at 11:36 AM and is filed under General, Libor. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.